Saudi Arabia battles market jitters after oil plant attacks

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It is a test for the kingdom's newly appointed energy minister Prince Abdulaziz bin Salman as the attacks could dampen investor confidence in Aramco's upcoming stock market debut.

DRONE ATTACKS. Smoke billows from an Aramco oil facility in Abqaiq about 60 kilometers southwest of Dhahran in Saudi Arabia's eastern province on September 14, 2019. Photo by AFP

It is a major test for the kingdom's newly appointed energy minister Prince Abdulaziz bin Salman – a half-brother to the crown prince – as the attacks could dampen investor confidence in Aramco's upcoming two-stage stock market debut. "If they can get production back online pretty quickly -- or at least assure the markets they can -- you might not see an enormous price spike," Rapier wrote for Forbes online.

"All key facilities in the world are exposed to terrorism, so the point here for investors will be to judge Aramco on the speed of recovery from such attacks," said Ali Shihabi, founder of the now-shuttered pro-Saudi think-tank Arabia Foundation.The strikes are unlikely to derail the much-touted initial public offering , but it could undermine investor confidence in the mammoth listing that the government hopes will raise up to $100 billion.

Unlike other major suppliers like the US and Russia, which rely on numerous producers spread out over large geographical areas, Saudi Arabia's production is reliant on a single entity – Aramco.

 

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